Google, Facebook and Microsoft have agreed to sign onto a French initiative that outlines principles for global tech companies to follow — including agreeing to pay their fair share in local taxes — while Amazon and Apple have not done so, highlighting France’s intent to move forward with establishing a taxation framework for these companies despite strong pushback from Washington.
- The so-called “Tech for Good Call” has been pushed by French President Emmanuel Macron amid public anger about U.S. tech businesses flourishing despite the pandemic-driven downturn, Reuters reported.
- According to the report, executives from 75 tech companies — including Google CEO Sundar Pichai, Facebook’s Mark Zuckerberg, and Microsoft President Brad Smith — have agreed to sign the initiative.
- Apart from agreeing to fair taxation, signatories of the initiative have also committed to preventing the dissemination of content featuring child sexual abuse, terrorism or extreme violence.
- The report added that Apple is currently engaged in talks with French officials and it could still join the initiative, however, Amazon has declined to sign up; Forbes has reached out to the e-commerce giant for a comment.
- Though not legally binding, the agreement on fairly paying local taxes represents a push back against the outgoing Trump administration, which has clashed with France and other European nations on the issue.
Some have questioned the effectiveness of such a non-binding agreement and have argued that the 2018 summit in Paris that led to this agreement was nothing more than a photo-op. Writing for TechCrunch Romain Dillet noted: “The Tech for Good summit was created for photo opportunities. Tech CEOs want to be treated like heads of state, while Macron wants to position himself as a tech-savvy president. It’s a win-win for them, and a waste of time for everyone else… In 2018, hundreds of organizations signed the Paris Call. In 2019, the biggest social media companies signed the Christchurch Call. And now, we have the Tech for Good Call. Those calls can’t replace proper regulation.”
In June, France and other European countries vowed to press forward with plans to implement a unilateral digital tax after the U.S. pulled out of negotiations led by the Organisation for Economic Co-operation and Development (OECD) on an internationally agreed-upon tax. The U.S. refused to even agree upon an interim change to global taxation laws that would mostly impact U.S. tech companies, and the Trump administration threatened retaliatory action if the European countries pressed on unilaterally. The European Union and its member nations have long been arguing that companies like Apple, Amazon, Google and Facebook pay minimal taxes, despite generating large profits from the region’s market.
In June, the French Finance Minister Bruno Le Maire told France Inter Radio that the U.S.’s exit from the negotiations was “a provocation” as they were “a few inches from an agreement on the digital giants.” Le Maire then vowed that “France will indeed have a taxation law in place of the digital giants in 2020.”
While it is unclear what President-elect Joe Biden’s stance on the international taxation talks will be, some believe that Biden’s willingness to engage with multilateral institutions might help move things forward. Before the elections, Anna Diamantopoulou, one of the candidates to become the next OECD chief in 2021 told CNBC: “We know that Biden is more conventional and more friendly to the international organizations generally.” An Ernst & Young report from earlier this month noted that the OECD’s taxation plan closely aligns with changes that Biden has proposed to the U.S.’s existing global minimum tax rules. “Thus, one might expect a Biden Administration to continue to be supportive of that part of the project,” the report noted.